Frack sand data shows looming trend in Permian

By Staff | March 12, 2018

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Energent, a global energy market research consultancy, has put together a new report highlighting the in-basin sand trend happening in the Permian. The report says operators looking to expand operations this year will turn to in-basin sand. Doing so could help them save $.40 to $.50 cents on the cost of frack sand which the Energent team believes would result in a potential savings of $500,000 per well.

Below is a summary of some of the other points mentioned in the report outline.

With more than 800 operators, 25 pressure pumpers and 30 frack sand producers, the Permian Basin produces 45 percent of light tight oil volumes in the U.S. The amount of investment, combined with more than 2,400 drilled but uncompleted wells in the basin means the Permian will continue to grow.

Most sand in the Permian has traditionally come from Wisconsin mines. Northern white sand from the region has been selling for $110/ton, according to the report.

Although sand demand in the play is expected to increase by 2.5 million tons per quarter in the next two years, sand mines opened or coming online soon in the region should have enough volume to meet the demand.

“The potential savings of in-basin sand are huge,” said Todd Bush, founder of Energent,”as long as operators are satisfied that it meets their technical requirements. They could save up to 50 percent on frack sand hauled from Wisconsin.”

Bush also said that assuming a 50 percent adoption rate of locally mined sand, incumbent suppliers will see a material decline in non-contracted volumes by the third quarter. “It will also focus attention on logistics within the basin itself—the truck fleet, retaining drivers and transport technology—which will also drive well economics.”